Chinese Crypto Lending Firm RenrenBit Raises $21 Million

The company circumvented Chinese law to issue a token sale.

Peer-to-peer lending and wallet start-up RenrenBit is in the process of raising $21 million via a token sale.

The Chinese company has already received commitments for selling all tokens, each valued at 1 USDT, within four hours of the initiation of the sale. The potential investors have two days to rethink their investment into the company, according to a Coindesk report.

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Founded in 2018 by renowned Chinese over-the-counter (OTC) trader Dong Zhao, the platform brokers deals between lenders and borrowers for loans in Chinese yuan and crypto-assets. However, lenders need to pledge other crypto assets as collateral.

The token is developed as an ERC-20 token and can be used to offset transaction fees for crypto-to-crypto and OTC trading on RenrenBit. The token holders can also pledge the tokens as collateral for taking loans on the platform.

According to the whitepaper, the 21 million tokens available for public sale consists of only half of the total generated tokens. The other half will be held by the team, out of which 2.1 million will be unlocked for trading.

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The sale was open to investors with at least 1,000 USDT in holding, which was set as the minimum limit for buying the tokens. The upper limit was set at 75,000 RRB tokens per investor.

A legitimate token sale?

Being a Chinese company, RenrenBit is also facing questions around the legality of its token sale as the Chinese government banned all initial coin offerings (ICOs) within the country in late-2017.

“RenrenBit held talks with the financial regulators and the central bank as early as January this year. We are clearly aware of the legal boundaries,” Zhao responded on his Telegram channel.

Before the token sale, RenrenBit attracted the attention of large investors and raised $3 million in Series A round led by major venture capitals including Dragonfly Capital and Zhao’s DFund. Crypto exchange Bitfinix also invested in Zhao’s startup.

According to Zhao, the company is valued at $16 million after the funding round.

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